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Market momentum flips bearish… and what it means for your portfolio. Be sure to check out the show on YouTube here: Watch on YouTube Look for Me and the Money Printer later today… and see the Transcript below… Stay positive, Garrett Baldwin Transcript It is March 24th. I hope you’re doing well. We’re one day away from opening day, so I know there’s a lot going on in the world, but let’s stick with that. Let’s stick with something that is good and positive and exciting. I haven’t had any coffee. I haven’t shaved, and I still have to do the Burr, and we’re all going to do the Burr. Do the Burr. All right, March 24th, doing it. Hope everybody’s having a good morning. April 9th is going to be the date that this war is going to end, apparently. So we got that going for us, which is nice. Marines may arrive this week. Six funds have been gated. So this is going great over in the private credit world. And gold is in a bear market. All right, there’s got to be good news in here somewhere, right? Well, here’s the Tuesday brief. We’re in the fourth week of the war. This is the day after the whiplash, and yesterday was very confusing as I will explain. Today in my Money Printer — this feels like a Sandra Bullock movie. If you can name the Sandra Bullock movie, you just win because you saw the Sandra Bullock movie. This was an interesting move in crisis management, interesting negotiation capacity, back channels, still trying to make sense of it, but nonetheless, this is the way this market operates. And I’m going to be very candid. This market has now four times gone through this period with this pressure index where one tweet, one message can just alleviate and pull all of that stress and that pressure back. And that is just enough. It just buys a little bit of time in this market. Now, we’re going to obviously find out whether or not some of these things are happening. Iran denying certain things, but then the new statements suggesting that there are nuclear concessions, freezing the missile projects for five years. Reports of dotting with 12 Iranian mines. Washington set April 9th as the day to end the war, so one week after my 45th birthday. Happy birthday to me. The Pentagon is weighing airborne troop deployment. These guys could be anywhere in the world on the ground in 18 hours. Thousands of Marines set to arrive on Friday. The Strait of Hormuz, reports of 12 Iranian mines and the threat to do more mine strikes in the near future. And Saudi Arabia is now inching toward joining the attacks as well. Monday saw a 1.2% rally evaporate overnight. Why? Well, again, the same questions still persist. What is actually happening in the back channels? Where is evidence of things? This is just how markets operate. And once again, as I’m going to point out today, it doesn’t matter what the AP headlines were, what NBC was saying, which was kind of siding with the Iranian view of this could just be bluster, or whether it was a negotiating tactic. It doesn’t matter because markets do what markets do. So people who spend too much time thinking about why the market did this the way that it did — the reality is markets don’t have time to wait. They don’t. So they will act on that information very, very quickly. And it is coming from the head of the United States government. They’re going to move. Now, Fortune calling this a TACO trade — Trump Announces and Chaos Occurs. New terminology here. But Iran reports suggesting very significant nuclear concessions, agreeing to freezing missile projects for five years. The Trump administration is eyeing their speaker — I’m going to get it wrong. I can’t pronounce anything right. I just want everyone to know this. This is impersonal. I will not pronounce things right. So I’m just going to call him Ghalibaf. Washington said April 9th is the deadline. Setting a date, deploying Marines, and mining a strait is a military operation with a diplomatic wrapper. Private credit — hey, don’t say I didn’t warn you. Haven’t been talking about this since October for no apparent reason. On February 20th, Blue Owl OBDC permanently shut, $1.86 billion, that runoff model. No more redemptions. Remember that great article, “The Lightning Lost the Game 6-2,” where the New York Times profiled what was happening with Blue Owl? The ownership of Blue Owl also owns the Tampa Bay Lightning, and the Tampa Bay Lightning co-CEO is buying everybody shots and talking great things while the stock was down 60% from all-time highs. And the New York Times writers wrote the last sentence of the article that Tampa Bay Lightning lost the game 6-2. They didn’t have to write that. They wanted to. BlackRock HBS Lending out March 6th. March 13th, Stone Ridge filled only 11% of requests — FinTech BNPL exposure. Morgan Stanley’s Enhaven on March 13th. March 23rd, the Apollo Debt Solutions — investors wanted 11.2%, getting 45 cents on the dollar. And now FSKKR Capital Corp., which I used to own, cut to junk by Moody’s. Non-accrual 5.5% and masking losses. This is not one fund. This is an asset class. This is a $265 billion meltdown, according to Fortune, and it is not over. The private credit numbers — $1.8 trillion. That is the conservative number. We’ve seen estimates from the Eurodollar University as high as $4 trillion. Default index 2.46%, rising since Q3. PIK usage 6% — borrowers are paying interest with more debt. And when there’s no money coming in the door, the circle stops. Software exposure 15 to 25%. Once again, the AI disruption is real. And the redemption requests for Q4 came in at $2.9 billion, up 200% from the previous quarter. So when borrowers pay interest with more debt and investors can’t withdraw, you don’t have a fund. You have a trap. A lot of people are asking me questions about gold. Do I have a back-up-the-truck number? The reality is right now, I do. If it comes back to 3,750, I’m happy to buy more gold. But I’ve been long gold since about 1,800. This is a bear market by definition. But I want to remind you, I’m not a person who believes in bull markets or bear markets. I believe in liquid markets and illiquid markets. And there’s a big difference between the two. When there’s lots of liquidity and money sloshing around and things moving into risk assets, that is just a liquid market. And that tends to create bull markets. But here’s the other side of this. Gold just had a manic run to 5,500. The last mile of that basically was from 4,400 to 5,500. We’ve gone up nearly 100% if you draw a line from the 2024 lows. Gold is up nearly 100% based on just this number, and I would have been happy with that. But when we start seeing bear market, that leads people to think, okay, I need to get out. No. All roads point to more monetary inflation, more monetary printing over time. So yeah, I’m holding my physical. I got out of gold paper on January 26th, largely because I didn’t understand what was going on. Gold went from $4,900 to $5,500 in three days. And I just threw my hands up and said, I’m going to take my money now because this doesn’t seem logical. And then two days later, we had the momentum turn negative on January 28th. And then two days after that, gold prices collapsed, silver prices collapsed. This was leveraged unwinding. And now in this environment, what’s important to note, you’re seeing forced liquidation. Eurodollar University pointed this out. I talked about it yesterday in my Money Printer article — this was happening in the Asian trading windows, these collapses in prices. These nations are selling gold after buying a ton of it to purchase oil. They need dollars. They need to be able to buy oil with those dollars. That’s why this matters. Gold’s down nine straight days, worst week since 1983, 9.4% drop, and the dollar index continues to bang against that $100 level. We’re at 99.11. That Eurodollar squeeze is happening. It’s real. If you don’t understand that, read my piece yesterday. I talked about five people who were talking about liquidity over the weekend and everyone pointing to the same issue — there are issues within plumbing. It was Snyder at Eurodollar University who really was focused on the gold selling and what he is deeming to be deflationary. Meanwhile, you had Lynn Alden talking about this print and whether or not the Federal Reserve will need to go to a significantly higher amount of monetary accommodation in the near future. I firmly believe that’s going to happen because all roads point to more printing. Chevron CEO coming out at CERAWeek and saying the physical supply of oil is tighter than the futures contracts suggest. It will take time to rebuild inventories of the right grades of crude. And that’s the key term. That refinery network that we have down along the Gulf Coast, that is largely for heavier oil. That type of stuff that comes out of the Gulf, comes out of Venezuela, higher sulfur content. It requires very specific types of refining capacity. This is not the type of stuff that enables cheap, lighter crude in the Permian Basin or even Russian light sweet crude. The reality is the refinery network needs a very specific type of crude coming in. So futures are whipping on Trump’s headlines, but the physical supply doesn’t move on tweets. And a lot of people have said this across the board, including a lot of the prominent Substack energy experts — they’re simply stating everybody, the reality is that the market has not adequately priced in new supply in the future. Diesel and jet fuel are under very significant pressure. The refining capacity for that is available in certain areas, but is the physical underlying product of crude there? Asia facing very serious concerns on supply. And even if a ceasefire were to happen tomorrow, shut-in production will take months to restart, particularly in the Gulf. And I mean, this is clearly true in places like Venezuela, where you drill oil and you leave a hole in the ground. And then a couple of months later, it’s just not there anymore. This is a very real issue that is going to take time to bring all of that stuff back online. And some investors, some places like Chevron and Exxon, which were getting back into Iraq, they may look at this and say, do we want to be here for the next five, 10 years? There’s going to be a lot of political shakeout over this over time. We have to give it a little bit of time and assess it, but I’m going to tell you real quick — if I had to pick somebody to be the next president of the United States from the private sector, I’m going to choose either the CEO of Exxon or the CEO of Chevron. On a world that operates on energy, on oil, the person who probably has relationships with every head of state around the world that are engaged in petro development, has operated a complex bureaucratic company with 80,000 employees — that’s the guy I listen to. And by the way, it helps if you’re a petroleum engineer. But there’s only like six people in the world right now who could be CEO of Chevron and probably only like two of them are available. And I’m serious when I say that because I had a headhunter who worked at that level. I did an interview and I thought there were like 100. He said, no, there’s only like six and only maybe two or three are available. So I listen to what Mike Wirth says. I think we have to obviously pay attention to what our Department of Energy head says, given that he came from the sector as well. But listen to what Wirth says. Listen to what Exxon says. Listen to those larger players, vertically integrated, that have exposure to international markets. JP Morgan cut its target from 7,200 to 6,000. I don’t care. 7,200 was way too high to begin with. But they were at 7,500. What would it take? Well, monetary accommodation, most likely, to get to 7,200. We are in a period that is very reminiscent of 2022. Lower highs, lower lows, concerns around credit, issues that are continuing to weaken this market. And the only way that you get there is you have some sort of catalyst. When I look at the way that the banks are operating right now in private credit and obviously the BDC stocks, a lot of that stuff is beaten up private equity names. And they might have a four or five year horizon when they’re buying — CEOs, CFOs of these companies. But I’m going to need to see some sort of policy support to the banking sector that is bigger than what we are seeing to get that off the ground. I don’t think we’re coming in at 7,000 without some new type of monetary support or fiscal support or Japan prints a bunch of money. The war may end. That’s fine. But I’m not necessarily convinced that that alone is going to get us back to that 7,200 level. We need policy support. That is what is missing. Momentum is red. No shocker there. Gundlach again saying going nowhere. Six funds are gated. Gold in a bear market. JP Morgan warning of 6,000. And if you want more from the Burr, obviously we have the readings that you could see every single day. You could follow it. We had a period yesterday where we had a bit of a pop in the market, and our cap-weighted number came down sharply because the semiconductor stocks were doing the lifting for the S&P 500 while the S&P 500 equal weight was still negative, suggesting that there’s still significant weakness in the market. So sign up for Me and the Money Printer. You get a weekly deep dive into the Fed, liquidity, and macro flows. We do a piece every morning across the markets on all of those elements. In addition, a Morning Printer Pro video and of course the access to MoneyPrinterPro.com to give you the breakout of the momentum stocks, breakdown, and the deep dive tool to allow you to understand where every stock that you are buying, trading, investing in sits in a momentum cycle. Postcards from the Edge of the World came out over the weekend. A lot of fanfare for that. I appreciate it, everybody. And the Insider Buying Report is available as well. Not a lot of insider buying going on right now, but we have active trading in that product as well. We sell put spreads on stocks that we like and we want to own. A lot of education around trading. So check that out as well. It’s a much smaller list of people, but those individuals will be getting access to InsiderStockBuys.com very soon. Manage risk. April 9th is the end date. Marines set for Friday. Six funds were gated, and the downgrade has just started for private credit. I’m Garrett Baldwin. I hope you guys have a great day. Any questions, obviously just hit me up in the comments section. Stay positive. About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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